UPDATE 5-Chile Collahuasi union workers start strike

* Strike starts, company says output not affected

* Experts expect output losses after a week of stoppage

* Some strikers stay at mine to protest replacements

* History suggests strike may be short-lived
(New throughout, adds output details)

By Fabian Cambero

IQUIQUE, Chile, Nov 5 (BestGrowthStock) – Union workers began a
strike over pay at the world’s No. 3 copper mine Collahuasi in
Chile on Friday, but the operator said output was unaffected
and could keep working for some time with replacement workers.

After five days of government-mediated talks failed, the
union has vowed a long strike at the mine. Owned by Xstrata
(XTA.L: ) and Anglo American (AAL.L: ), it produces 535,000 tonnes
a year, or 3.3 percent of the world’s mined copper.

Past strikes at Chilean mines have not generally lasted
long. A strike during Collahuasi’s last wage talks in 2007
lasted four days. Only two of eight major union strikes at
Chilean copper mines in the past decade lasted longer than 16
days, none longer than 42 days.

There were no signs that either side will resume talks.


Graphic on top Chile mines: http://link.reuters.com/xyt38p

Graphic on Collahuasi output: http://r.reuters.com/zur52q

Graphic on copper supply: http://r.reuters.com/req72q

TAKE A LOOK-Chile Collahuasi mine strike [ID:nN27209201]

ANALYSIS-Possible threat to copper supply [ID:nN27263623]

TIMELINE-Chile’s major mining strikes [ID:nN04140477]


Some strikers vowed to stay at the deposit, 4,400 metres
(14,400 feet) high in the Andes mountains, to protest
replacement employees that the union calls illegal but the
company says it has the right to hire.

Chilean law allows companies to hire replacement workers
for certain parts of the operation. The company has urged
striking workers to leave the deposit.

The operator has pledged to maintain output. It withdrew
non-essential staff not linked to production on Thursday.

“Output is normal because the contingency plan is working,”
said Bernardita Fernandez, a spokeswoman for the mine’s
operator. “Just as workers can go on strike, the company can
continue its operations and, if necessary, make the
replacements it deems necessary.”

Industry experts said mine output could start to ebb after
a week. [ID:nN05111737]

The standoff could set a precedent for upcoming wage talks
at three other Chilean mines accounting for nearly 20 percent
of the country’s annual output, or 1.02 million tonnes.

The threat of a strike helped boost benchmark copper prices
(CMCU3: ) on the London Metal Exchange to near record highs on
Friday. [MET/L]

Workers struck even after the mine operator, Minera Dona
Ines de Collahuasi, sweetened its wage proposal. Workers
insisted on better terms, citing high copper prices which have
brought record profits to mine owners.

The operator raised its offer to $27,000 in bonuses and
benefits per worker from an offer of $19,000, according to a
copy of the latest wage proposal seen by Reuters.

The proposal, including benefits, would mean boosting
workers’ monthly wages by 15-20 percent. Union sources said the
workers want a increase of more than 40 percent.

The last offer was in line with terms accepted by workers
at the world’s No. 1 copper mine, BHP Billiton’s
(BHP.AX: )(BLT.L: ) Escondida late last year, heading off a

Union workers in the top copper-producing country could
copy the Collahuasi union’s tactics to wrest better terms in
labor negotiations due to start in coming months, such as
Codelco’s Radomiro Tomic and El Teniente mines.

Chile’s miners are basking in public support following the
dramatic rescue of 33 workers trapped underground for 69 days.

Government-led mediation began last Friday, two days after
union workers overwhelmingly rejected a company wage offer and
voted to strike.
(With reporting by Antonio de la Jara, Brad Haynes and Simon
Gardner in Santiago; Writing by Simon Gardner; Editing by David

UPDATE 5-Chile Collahuasi union workers start strike